Abstract: Chronic low-grade inflammation and insulin resistance are intertwined in obesity and type 2 diabetes. Low- grade inflammation in liver catalyzes the disease progression from benign steatosis to nonalcoholic steatohepatitis (NASH). To date, genetic factors that effectively link insulin resistance to low-grade inflammation are incompletely characterized. During the past decade, our laboratory has focused on FoxO1, a transcription factor that integrates insulin signaling to glucose and lipid metabolism. We showed that FoxO1 becomes deregulated in macrophages and this effect contributes to abnormal macrophage activation and proinflammatory cytokine production in both peritoneal and tissue macrophages in mice with dietary obesity or overt diabetes. We also found that myeloid-conditional FoxO1 knockout mice had reduced low-grade inflammation in response to overnutrition or endotoxin, whereas myeloid-specific FoxO1-transgenic mice had increased systemic and tissue inflammation under similar metabolic stress conditions. These new data underscore the physiological importance of FoxO1 in regulating macrophage activation and polarization. We propose to delineate insulin-Akt-FoxO1 signaling in macrophages. Our central hypothesis is that FoxO1 integrates insulin signaling to cytokine gene expression in macrophages, and FoxO1 dysregulation links impaired insulin action to abnormal macrophage activation and skewed macrophage polarization toward inflammatory states, contributing to inflammation and NASH in obesity and diabetes. To address this hypothesis, we propose three aims: 1) To determine the physiological effect of FoxO1 gain- vs. loss-of-function in macrophages on insulin action, inflammation, steatosis and fibrosis in myeloid-specific FoxO1-transgenic vs. myeloid-conditional FoxO1 knockout mice, 2) To characterize the mechanisms by which FoxO1 regulates macrophage activation, polarization and migration in tissues in obesity and diabetes, and 3) To determine the pathological contribution of myeloid FoxO1 dysregulation to low-grade inflammation, insulin resistance, steatosis and fibrosis in db/db mice with overt diabetes and mice with FPC (fructose, palmitate and cholesterol) diet-induced NASH. Our studies will gain new insights into the mechanism of abnormal macrophage activation and polarization, and address whether myeloid FoxO1 dysregulation is liable for driving the evolution of steatosis to NASH. Our data will characterize FoxO1 and/or its downstream effectors as potential therapeutic targets for suppressing inflammation to ameliorate NASH in metabolic diseases.